Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish

An allocator’s agenda for a reflating world

Multi-Asset Strategist Nick Samouilhan and Investment Directors Andrew Sharp-Paul and Matthew Bullock focus on some suggested ”to-do” items for asset allocators in response to the potentially reflationary impact of the COVID-19 vaccines and fiscal policy stimulus.

The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.

This quarter, we focus on some suggested ”to-do” items for asset allocators in response to the potentially reflationary impact of the COVID-19 vaccines and fiscal policy stimulus. We also highlight what we think are the most important market dynamics that allocators should keep a close eye on going forward.

A flurry of positive change

Global conditions have changed so quickly that it’s important to remind ourselves that, as late as November 2020, allocators faced: i) a global economy locked down under significant mobility constraints, with seemingly no end in sight; ii) an accelerated COVID vaccine development process with no meaningful results to show; and iii) a potentially disputed US presidential election that put further US fiscal stimulus in doubt.

Those conditions resulted in global bond yields remaining near historic lows, while many investors sought refuge in either structural sector-specific themes (such as technology and health care) or in pockets of growth and potentially higher investment returns (such as growth-oriented stocks and more speculative technology companies). Fast forward a quarter and, thanks to two major positive events during the intervening months, the world is now rapidly “reflating.”

The first such event was the US election, which not only produced a more certain outcome than expected, but also led to a US political setup more open to significant further fiscal spending (albeit of the ”borrow-and-spend” and not the ”tax-and-spend” variety). Secondly, the COVID vaccine results, released in November and December 2020, surprised on the upside with their high degree of efficacy and subsequent swift approval and rollout.

The upshot is that allocators are now facing a radically different economic outlook than they were in the fourth quarter of 2020, with 2021 growth widely expected to be…

To read more, please click the download link below.

Recommended for you

<span>Insurance Multi-Asset Outlook — </span>Strong but slowing growth: A tale of two narratives
Markets appear to be caught between two hard-to-reconcile narratives: The pace of economic growth looks poised to slow, but the level of growth is likely to stay relatively strong. Multi-Asset Insurance Strategist Tim Antonelli and Investment Strategy Analyst Daniel Cook offer insights for global insurers at this point in the cycle.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
Insurance Multi-Asset Outlook — Strong but slowing growth: A tale of two narratives
,
publish
Tim Antonelli
 CFA, FRM, SCR
<span>Multi-Asset Outlook — </span>With growth and policy, which matters more: Level or change?
While macro risks may be elevated somewhat, Nanette Abuhoff Jacobson and Daniel Cook still see opportunities, including in European equities and commodities. They also argue for being selective in credit while maintaining fixed income for diversification.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
Multi-Asset Outlook — With growth and policy, which matters more: Level or change?
,
publish
<p style="font-size: 13px; margin:7px 0;">FUTURE THEMES | SOCIETY</p>The future of work: Why societal shifts matter
While the pandemic has accelerated existing shifts in people's working lives, these changes may just be the start. We assess the future of work in 2030 and highlight some potential investment implications.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
September 2021

FUTURE THEMES | SOCIETY

The future of work: Why societal shifts matter
,
publish
<span>Top of Mind</span> Investing for the long term (in a short-term world)
With short-term behavior evident across the financial landscape, Multi-Asset Strategist Adam Berger explores the intuitive and quantifiable advantages of being more long term, and he offers seven habits that can help asset owners cultivate a long-term mindset.exc
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
September 2021
Top of Mind Investing for the long term (in a short-term world)
,
publish
Monthly Market Snapshot: August 2021
A monthly update on equity, fixed income, currency, and commodity markets.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
September 2021
Monthly Market Snapshot: August 2021
,
publish
Mid-2021 Investment Outlook
As you look ahead to the second half of 2021, thought leaders from across our investment platform share their views on pressing questions.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
August 2021
Mid-2021 Investment Outlook
,
publish
Update on key sustainability initiatives
We highlight progress on key sustainability initiatives: interim targets for our net-zero commitment, inclusion of location data in climate disclosures, and expanding our compliance with SFDR.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
August 2021
Update on key sustainability initiatives
,
publish
Using climate science to uncover investment opportunities
Investors are increasingly aware of the risks posed by climate change, but perhaps less so of the unexpected opportunities that climate science can help uncover.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
July 2021
Using climate science to uncover investment opportunities
,
publish